Annual Report 2007 - Severstal

Principal events of 2007
January
Chairman Chris Clark and other Independent Directors – Ronald Freeman,
Martin Angle and Peter Kraljic – became Severstal shareholders.
February
Investor Day in London.
April
Two billion rouble investment programme launched at Cherepovets Steel Mill
to improve hot-dip galvanising line.
Karelsky Okatysh began extraction and processing of iron ore at the new
Korpangsky deposit.
Senior Independent Director – Rolf Stomberg – became Severstal shareholder.
May
Severstal acquired stevedore company Neva-Metall and shipping agent
Neva-Metall Trans for US$100 million.
Severstal increased its stake in Lucchini to 79.8%.
Severstal purchased the 25% stake in Severgal from ArcelorMittal.
June
Lucchini sold railroad wheel production business Lucchini Sidermeccanica
to SINPAR for Euro 127.8 million.
Karelsky Okatysh signed a three-year contract to deliver iron ore pellets to Corus.
Severstal started the construction of Sheksna pipe and section mill.
The production facility will come online in H2 2009.
July
Severstal signed an agreement with the Government of the Saratov Region for
the construction of a mini-mill. US$500 million will be invested in the project.
August
Bluecone Limited, owned by Severstal, acquired 22% of gold miner Celtic
Resources Holdings Plc.
Vorkutaugol received the “Environmental Standard” certificate at the first
“Russia’s Environmental Support” competition.
September
Severstal reported a record US$7,711 million in first half revenues, up 31.1%
year-on-year. EBITDA was up 60.7% at US$2,094 million.
Severnaya Zolotorudnaya Kompaniya (owned by Severstal) won the rights
for geological exploration and production of gold ore at the Uryakhskoye ore
deposit in the Republic of Buryatia.
October
Karelsky Okatysh acquired rights for exploration and production of iron ore
at the South Korpangsky iron ore deposit.
Severgal was awarded two quality management certificates for the production
of hot-dip galvanised cold-rolled steel by Lloyd’s Register.
SeverCorr steel mill, located in Columbus, Mississippi, began production.
Severstal acquired two gold-mining businesses: Neryungri Metallic and Rudnik
Aprelkovo for a total consideration of US$105 million and US$153 million,
respectively.
Severstal North America blast furnace “C” began production after 98-day
modernisation outage.
November
Cherepovets Steel Mill was awarded Lloyd’s Register certificates for the
production of normal and high strength steel.
Izhora Pipe Mill successfully achieved certification of compliance with the
DNV offshore pipeline quality standard.
Severstal sold 73.1% of Metallurgic Commercial Bank to Kapital LLC for a total
consideration of US$43 million.
December
During August–December 2007, Severstal acquired an 86.3% stake in Celtic
Resources Holdings Plc. for a total consideration of US$264.6 million.
Severstal awarded the prize for “The best progress in corporate governance”
by the Investor Protection Association.
2008 events
January
Severstal acquired a 100% stake in Baracom Limited from its majority
shareholder for US$84.4 million. Baracom owns 79.9% of the voting stock of
the holding structure, which controls 74.2% of SeverCorr. Accordingly, starting
from January 2008 SeverCorr will be included in the Severstal’s consolidated
financial statements.
Severstal acquired the remaining 13.7% stake in Celtic Resources Holdings Plc
for US$44 million.
March
Severstal reported a 22.5% increase in full year revenues to US$15.25 billion
and a 33.8% rise in net profit to US$1.94 billion.
April
Severstal sold its stakes in OAO Mine Berezovskaya, OAO Mine Pervomaiskaya and
ZAO Zhernovskaya-3 to ArcelorMittal for a total consideration of US$652 million.
May
Severstal acquired the Sparrows Point plant in Baltimore, Maryland for
US$810 million.
June
Severstal signed merger agreement to acquire 100% shares of Esmark Inc.
for US$775 million.
July
Severstal acquired the WCI Steel plant in Warren, Ohio for an enterprise
value of approximately US$370 million.
Severstal Annual Report 2007 11